Lifestyles of the fabulously wealthy to whom recession is an unknown concept
They are neither threatened by global recession nor affected by inflation. They will down a Sh5,000 tot of whisky or quaff a Sh20,000 bottle of champagne and think nothing of it.
They have few qualms about buying vehicles that cost upwards of Sh10 million and their property valuations often include figures of over Sh20 million.
They do not need to chase down a bank or company loan to buy a car or a home, yet pricey vehicles like the Chrysler and the latest model Range Rovers litter their driveways.
They are the fabulously wealthy of Kenya. And while most Kenyans have been tightening their belts, the rich continue to amass luxury cars and lavish homes.
Clear indication
Rashid Nziwa, a motor vehicle salesman at a car yard in Nairobi, says that while the overall volume of car sales may have gone down over the past two years, the sale of more costly vehicles has risen, a clear indication that the rich still have money to splash.
Mr Nziwa, who prefers not to name his employer, says his company sells no fewer than three of the latest model of the Toyota Prado each month. The buyers either walk in and “cut cheques”, he says, or send their assistants to “close the deals”. A second-hand Prado goes for about Sh3 million.
MPs are among the buyers, he said, but the majority are wealthy business people.
And a majority of the wealthy, having acquired plush residences in Nairobi – some going for as much as Sh60 million – are extending their interests to upmarket residential developments on the outskirts of the capital.
A property dealer with Crystal Valuers Ltd says that while the sale of high-end residential properties may have declined, there is increasing excitement over estates being developed on the periphery of Nairobi and near satellite towns like Thika. Some of these residential properties, priced between Sh2.5 million and Sh4 million per unit, are being constructed with the middle-income professional in mind, and they are moving fast.
But most of the buyers don’t come from the middle-income group; the main buyers are the very wealthy, according to the property dealer, who wasn’t comfortable being named because he didn’t want to breach the trust of clients.
High sale rate
“We are receiving up to six payments in a day. That is a high sale rate out of Nairobi,” he said.
The result of the quick purchases, many of which appear to be for purposes of speculation, is a further upward pressure on real estate prices, pushing the properties out of the range of the original target market.
In response to rising demand from the big spenders for properties in the outskirts of Nairobi, Crystal Valuers placed adverts in newspapers recently for a planned residential complex three kilometres from Thika town, about 40 minutes’ drive from Nairobi.
The development is being marketed as “Africa’s Premier Golf Estate”. The property, according to the advert, will consist of residential homes constructed around an 18-hole golf course on which a members’ clubhouse, planned to accommodate a fitness centre, shops and restaurants, will be constructed.
The estate, earmarked for completion next June, will also have tennis courts, a swimming pool, a wellness centre, conference facilities wired with IT infrastructure including video conferencing, an education facility that will accommodate learners from baby class level to high school, a shopping complex, and a five-star hotel.
The concept reads more like a story from a children’s wonderland, complete with playgrounds, horse riding facilities, and cycling pathways and is clearly aimed at big spenders who want to live large outside central Nairobi.
But there is also a dark side to this world of wealth.
It is not news that the gap between wealthy and average Kenyans is wide; more alarming is that the gap is growing wider and fast, according to Prof Winnie Mitula of the University of Nairobi.
She warns that if the equity issue in the country is not resolved quickly, tension could boil over and perhaps result in the kind of violence experienced after the last General Election.
“The problem is critical. Equity is a major thing and Vision 2030 should, indeed, be about equity. Employment must be generated to avert a crisis. The government will tell you about youth and women’s funds, but these are just a drop in the ocean,” she said.
Surge in prices
The recent sudden surge in fuel prices, galloping food prices, the expanding domestic expenditure on water as a result of scarcity, and the high electricity bills that Kenyans begrudgingly pay every month are now summed up in an AIG East Africa projected overall inflation rate of about 20 per cent.
While releasing the company’s third-quarter earnings last Wednesday, AIG’s senior investment manager Edward Gitahi warned that interest rates could be pushed higher as the government competes with the private sector to borrow money for financing its budget deficit of about Sh109 billion.
In May, according to the Central Bank’s Monthly Economic Review, overall 12-month inflation was showing a downward tendency, having declined from 26 per cent in April to about 19.5 per cent.
But, soon after, it appears the situation reversed, according to AIG findings and projections. The latest details paint a gloomy economic picture.
To the super rich – who make up less than five per cent of Kenya’s population – such news seems to go in one ear and out the other.
They maintain their lavish lifestyles, which makes Prof Mitula wonder: “Either they had accumulated so much over the years and they are now spending, or they know how to get resources.”
For more than six years, costly apartment blocks have been steadily sprouting in Nairobi’s suburbs like Kilimani, Kileleshwa and Westlands.
In 2007, HassConsult, a real estate and property development company, said these properties were selling like hot cake. They would be bought up in cash within two weeks after being advertised.
Indeed, after buying expensive cars and investing in properties in Nairobi and in Thika, some Kenyans can still afford to hire choppers to nyama choma joints in Maasai land.
A story is told of how one of Kenya’s tycoons in the construction industry, while picking up a friend from a club in Nairobi, decided to invite her entire entourage for a treat.
He led them to Wilson Airport, from where they were ushered into a chopper and flown to a five-star resort out of Nairobi. They were flown back after they had had their fill.
About two years ago, the CEO of a top company is said to have spent over Sh140,000 in less than 30 minutes at an auction of ordinary art pieces at a Nairobi hotel.
Welcome to the world of the wealthy, who don’t have second thoughts about hopping into a helicopter to go and order roast goat at one joint, fly to another destination for several shots from the exclusively expensive Johnnie Walker Blue Label King George V Edition, a rare Scotch whisky that retails for not less than Sh25,000 for a 750ml bottle, and then fly back to collect their meat.
